Wall Street and individual investors alike have an insatiable appetite for anything electric vehicle (EV)-related. Even the most speculative EV companies with long-shot odds of becoming lasting companies are getting multi-billion-dollar valuations. Automotive manufacturing has, historically, been a brutal industry for investors. While electric vehicles may benefit from capturing market share and see outsized growth in the short run, competition in this industry is getting fiercer by the day. 

Rather than trying to pick which of these vehicle builders is going to win the horse race, there is much more value in companies providing the components to a wide variety of manufacturers all at once. One that stands out today as a likely behind-the-scenes winner in EVs is BorgWarner (BWA 0.76%). Here's why its corporate turnaround could make it a top buy-and-hold electric vehicle stock.

From turbo to everything electric

Most of us can rattle off several vehicle brands off the top of our head, but not many of us can name the manufacturers of the components in those vehicles. The 140-year-old company manufactures several drivetrain components. Its bread-and-butter business for decades has been in fuel injectors, turbochargers, and other engine components that are centered around the air intake and exhaust of engines and are prominent features in commercial and high-performance engines. Ford and Volkswagen AG are its largest customers and, combined, represent about 19% of annual sales.

For decades, BorgWarner was a fantastic investment. For example, its 20-year total return up until the end of 2014 was about triple that of the S&P 500. Since 2015, though, the company's stock has taken a hit, due to concerns that electric and hybrid vehicles would start to become a greater portion of the vehicle fleet and BorgWarner's powertrain components would no longer be needed.

In the past few years, though, the company has been quietly building a new division that caters exclusively to the electric vehicle market. Through internal development and acquisitions, it now manufactures batteries for commercial vehicles, electric drivetrains, inverters (the components that translate stepping on the pedal to the electric drivetrain), and DC fast charging stations. As of its most recent quarter, about 33% of sales came from its e-propulsion and drivetrain division.

It's "pedal to the metal" in EVs from here

BorgWarner's EV business has been a key growth engine for some time, but higher research and development spend and acquisition costs have led to lower margins in recent years. That should change soon, though, as management is forecasting big gains in EV-related sales in the coming years.

Management estimates that revenue from batteries, inverters, and drivetrains will grow at annualized rates of 55%, 55%, and 40%, respectively, out to 2025. It also expects that sales of components for hybrid vehicles will grow 20% annually over that same time. Even more encouraging is that much of this revenue is already booked through contracts with customers, and not just best guesses at what the market will be. 

On top of these existing projections, management intends to make $2 billion in acquisitions in electric vehicles and dispose of about $3.5 billion worth of legacy businesses to accelerate its exposure to electric vehicles by 2025. One of its recent acquisitions was Rhombus Energy, which gave it exposure to DC fast chargers and should be another high-growth market.

A solid business selling at a cheap valuation

Admittedly, BorgWarner hasn't been an excellent investment over the past decade. Its total return over the past 10 years is only 3%. That said, there are likely reasons for this underperformance, as the company was building its electric vehicle business from scratch while leaning on its existing business to fund the transition. If the business is able to get anywhere close to management's growth projections for its electric vehicle division, then we should expect a significant improvement in the company's bottom line. 

Today, shares of BorgWarner trade for about 9.3 times management forecasted earnings for 2022 and have a dividend yield of 2%. That makes the company one of the few investments out there that has significant upside from electric vehicle growth, is profitable today, and is trading for a reasonable valuation. That rare combination of qualities in an EV stock should make it a serious contender for any investor looking for buy-and-hold investments in the electric vehicle industry today.